Chrysler Seeks Uaw Aid For New Car

January 08, 1991|By Jim Mateja, Auto writer.

DETROIT — Chrysler Corp. is engaged in talks with the United Auto Workers aimed at finding an economical means of building a small-car replacement for the once- popular Dodge Omni and Plymouth Horizon.

The action seems to indicate that Chrysler favors building a small, high- mileage car on its own to meet federal mileage standards rather than building one with a foreign partner.

``My personal hope is that we can do a small car on our own,`` Chrysler President Robert Lutz told the media gathered here for the Detroit Auto Show.

To emphasize its efforts for a small, high-mileage car, Chrysler is using the show to display a concept vehicle called Neon, a four-passenger model featuring a new two-stroke, 1.1-liter, four-cylinder engine. Lutz said it develops greater horsepower, yet obtains more mileage, than a four-cylinder engine twice the size.

Chrysler is expected to annunce Tuesday that the engine will move from concept stage to active status with the goal of building it for the mid-`90s, a move which further sets the stage for a new small Chrysler car.

``If you do a small car with a partner, you don`t save any money,`` Lutz said.

``If you import a small car, you can`t count it toward your corporate average fuel economy (CAFE) regulations, and no one is going to hand over 200,000 small cars to you and not charge you,`` he said, apparently alluding to getting small cars from Chrysler`s Japanese partner, Mitsubishi, and affixing the Chrysler name to them.

``Whether with a partner or on our own, it`s tough to make money on a small car,`` Lutz said.

Lutz revealed that Chrysler has entered into talks with the UAW to determine the economic feasibility of building a car in the U.S. The talks center on whether labor costs can be trimmed in order to make a small car a reality.

The government late last year backed off from plans to raise CAFE standards that would have forced all automakers to obtain a 40-mile-a-gallon average from their fleet of cars, up from the current 27.5 m.p.g

However, efforts to renew the fight for a 40 m.p.g. CAFE are expected to be initiated in Congress this month, especially in light of the Persian Gulf situation.

``We now are in discussion with our UAW partners about a small car in order to get cost-competitive, which we have to be,`` Lutz said. ``We must work with the UAW and our suppliers to find innovative approaches to reducing the labor costs in the cars.``

There have been reports Chrysler hopes to reach a final go/no-go decision on a small car by April in order to get it to market by mid-1994.

``The UAW is showing cooperation by agreeing to form a joint study team on how we can go about doing this thing,`` he said. ``They realize the company needs this car and that it must be a financially viable program.``